An item that would be classified as preliminary expenses in a company's account is
Formation expenses
Administrative expenses
Distribution expenses
General expenses
Correct answer is A
Preliminary expenses are expenses expended in the formation of a company. They are referred to as formation expenses and it is a part of the fictitious assets of a company.
| GH⊄ | ||
| January 1 | Petty cash in hand | 1034 |
| January 1 | Petty cash to restore float | 6966 |
| January 6 | Bought note books | 656 |
| January 7 | Paid wages | 1828 |
| January 14 | Bought postage stamps | 750 |
| January 16 | Paid to Biodun a creditor | 1072 |
| January 18 | Paid wages | 1856 |
| January 23 | Purchased envelopes | 874 |
| January 28 | Purchased postage stamps | 420 |
Amount reimbursed at the end of the month was
GH⊄ 6,928
GH⊄ 6,966
GH⊄ 7,456
GH⊄ 8,000
Correct answer is C
Total transaction during the period = 656 + 1828 + 750 + 1072 + 1856 + 874 + 420
= GH⊄7456
| GH⊄ | ||
| January 1 | Petty cash in hand | 1034 |
| January 1 | Petty cash to restore float | 6966 |
| January 6 | Bought note books | 656 |
| January 7 | Paid wages | 1828 |
| January 14 | Bought postage stamps | 750 |
| January 16 | Paid to Biodun a creditor | 1072 |
| January 18 | Paid wages | 1856 |
| January 23 | Purchased envelopes | 874 |
| January 28 | Purchased postage stamps | 420 |
Amount spent on stationery was
GH⊄ 1,170
GH⊄ 1,076
GH⊄ 1,530
GH⊄ 874
Correct answer is C
Amount spent on stationery = 656 + 874
= GH⊄ 1530
Use the following information to answer questions below
| GH⊄ | ||
| January 1 | Petty cash in hand | 1034 |
| January 1 | Petty cash to restore float | 6966 |
| January 6 | Bought note books | 656 |
| January 7 | Paid wages | 1828 |
| January 14 | Bought postage stamps | 750 |
| January 16 | Paid to Biodun a creditor | 1072 |
| January 18 | Paid wages | 1856 |
| January 23 | Purchased envelopes | 874 |
| January 28 | Purchased postage stamps | 420 |
Amount posted to the personal ledger was
GH⊄ 1,034
GH⊄ 1,072
GH⊄ 6,966
GH⊄ 3,684
Correct answer is B
The amount paid to biodun a creditor represent the ledger in the petty cash book which amounted to GH⊄ 1,072
Resources owned and controlled by a business are classified as
Assets
Capital
Liabilities
Drawings
Correct answer is A
Assets are the resources or properties of a business organization e.g. land and building, premises, motor van etc. It is calculated as Asset =Capital + Liabilities.